Sell Hard and Prepare for the Worst: Three steps to survive and thrive as a deep tech founder in 2026

Deep tech founders and their allies, Happy New Year!

We have been out for the holiday break, and as we get up to speed in 2026, I wanted to share a few end-of-year thoughts and reflections from the last couple of weeks. I hope this can help you jump-start 2026 and accelerate your building activities.

TL;DR

1. Make this the year of the customer. Show investors REAL traction to unlock checks.

2. Get ready to pounce on grants. We’re optimistic that the US government will start releasing new funding opportunities in 2026.

3. Channel your inner prepper. Between the potential for an AI bubble and conflicting economic signals about the health of the US economy, every founder should be ready for a downturn.

Give investors what they want: traction

In 2025, we learned that hopes and dreams are no longer enough (unless you are an AI startup). Deep tech startups seeking private investment must demonstrate REAL customer traction. I’ve heard from multiple founders in the energy and cleantech sectors that early-stage investors want to see customers committing to a company before investing. Examples include a joint development agreement or a pre-purchase agreement.

So…

• Ramp up customer outreach to kick off 2026 strong - Set a goal of having 25+ conversations with potential customers in January. Find a new conference to attend in Q1 2026 where your ideal customer will be.

• Fill the gaps in your business plan with customer-validated data - Set aside 10+ hours to review your business plan, your financial models, and your unit economic or technoeconomic analyses. Review the major assumptions and determine whether they remain valid. Identify the most critical ones and prioritize them for validation in customer conversations (see above).

• Go into sales mode overdrive - Review and update your sales pipeline. If you have a product ready for customers, re-engage qualified leads from last year and see if they are prepared to buy. If they aren’t, ask questions to understand what is holding them back. For your existing customers, schedule a feedback session to understand what your product is doing well, what it could do better, and what is frustrating them. If your product isn’t in the market, review your potential customer list and consider one-off projects or pilot programs that could help validate your future product. Again, investors want to see REAL traction.

Be ready to pounce on grant funding

2025 was a horrible year for federal grant funding. Trump administration priorities caused funding pauses or cancellations. And the SBIR program is in limbo since its authorization lapsed at the end of September.

However, let’s hope that 2026 sees things settle into a new normal. Congress did pass a defense spending bill with new provisions to make it easier to do business with the DoD. Check out Commercial Solutions Openings and the DIU program.1 The Trump administration has been talking a good game about unleashing innovation. If a full budget is approved by the end of January, we might see agencies resume awarding. I have already seen some DOE awards that were in limbo get approved, and money is flowing again.

So…

• Set up alerts and feeds to get updates from funding agencies about funding opportunities: Don’t miss the opportunities when they are released. Sign up for the newsletters of appropriate funding agencies. Look for state-level resources to help you identify grant opportunities. Set up Google Alerts or similar tools to monitor changes on funding agency websites.

• Identify research objectives you would fund with grant funding to quickly prepare applications: Review your product roadmap with your CTO. If a grant were available, what parts of the roadmap would be a good fit for a project proposal? Outline a few key research objectives and milestones that could be the basis for an application, so you are ready when opportunities are released.

• Identify and discuss collaboration ideas with partners in advance: Once you know what you want to work on, make sure you have the right team ready. Confirm the availability of partners and contractors for the coming year.

Channel your inner prepper

If you haven’t heard, people are worried that a bubble is forming in AI investment. And there are mixed signals about the health of the US economy. If these two things collide or some other crisis arises, we could be headed for a recession.

If the economy stumbles and stock prices enter bear territory, investors will take action. The initial response will be to freeze investment activities in “risky” investments. There will be a flight to safety, which probably means less money for startups in the immediate aftermath. I saw this personally in the early days of the COVID-19 pandemic when I was pitching BlueDot Photonics. However, once the dust settles, investors will start looking for new growth opportunities.

What does this mean? It depends on the stage of your startup.

Starting a company in the middle of a downturn can be a great idea. Talent is more affordable. Companies are looking to improve productivity to shore up their bottom lines. If you can position your company to capture the growth rebound, you can significantly increase the likelihood of a successful exit. So, if you’ve been thinking of starting a company but haven’t yet, the depths of a recession might be a good time to execute on your idea.

However, if you have a startup, and it’s raising growth capital when a downturn hits, you might need an additional 6 months of runway to close the next equity round. So, develop a contingency plan with your management team and board members, do the scenario planning, and agree on the plan so you can execute quickly if needed.

So…

• Create an emergency plan: If you haven’t already, create a monthly budget for the year and figure out how much runway you have. Then, ask yourself, what would it take to extend that runway by six months? What costs get reduced, which people get furloughed, and what are the triggers for executing the plan? It’s better to be prepared than have to make rash decisions in the middle of a crisis.

• Think strategically about hiring and firing: So, your business plan had you hiring 10 people this year. What milestones were they helping you achieve? Is there a way to get started on the milestones with a smaller team? Can you leverage contractors instead of full-time employees? Prioritize results over previous plans. Ruthless prioritization will be key in a downturn, so make sure you are prepared to both hire and fire quickly to stay on track.

• Ensure your value proposition is recession-proof: Discretionary spending is the first thing to go in a downturn. If you are a premium product or a nice-to-have, things could get rocky. However, if you are a core part of customer operations or a key driver of productivity, you’ll probably be in a good position not just to survive but to potentially thrive as customers look to save money. Be indispensable!

Which of these steps are going to be the biggest challenge for you and your team? Drop a note in the comments, and we can brainstorm solutions.